Developers are using a legal loophole to build less affordable homes than required in order to protect their profit margins

GREEDY developers are using a legal loophole to block eight in ten affordable homes being built, shocking new figures revealed last night.

It allows firms to cut down on the number of affordable homes they have to build – and protecting their profit margins.

Getty – Contributor

Developers are using a legal loophole to block the number of affordable homes required[/caption]

A Freedom of Information request by housing charity Shelter found the “viability assessments” had reduced the number of the much-needed homes by 2,500 last year.

And the worst offenders were in cities with housing shortages – including Birmingham, Bristol, Leeds, Manchester and the borough of the Grenfell tragedy – Kensington and Chelsea.

Viability assessments allow developers to reduce the number of affordable houses they build on their site, after showing that building them risks reducing their profits by a certain agreed extent.

Shelter said: “The research shows that when the loophole was used in the last year, some 2,500 affordable homes – 79 per cent – were lost from the number required by council policies.”

Housing charity Shelter chief executive Polly Neate says that this is dramatically reducing the number of affordable home available for people

The charity said its research sampled Birmingham, Brent, Bristol, Cambridge, Leeds, Leicester, Manchester, Newcastle and Oxford, as well as Kensington and Chelsea, and Southwark in London.

It said the assessments are being used more widely than in just these areas – “so the annual figure of lost houses is likely far higher”.

Shelter chief executive Polly Neate said: “What this research reveals is the scale at which developers are able to use legal loopholes to protect their profits and dramatically reduce the numbers of affordable homes available for people.”

Shelter said its research indicates that viability tends to crop up more often on larger developments.
Planning Director at the Home Builders Federation (HBF) said affordable housing requirements are ‘aspiriational targets’HBF

Andrew Whitaker, planning director at the Home Builders Federation (HBF), said: “All affordable housing requirements set out in planning policy must be negotiable – they are aspirational targets.”

He continued: “We have become increasingly reliant on the private sector for affordable housing provisions, in addition to expecting contributions towards infrastructure and local amenities.

“However, there is a limit as to what can be extracted from development sites before they become unviable.”

Mr Whitaker said: “Without a willing landowner and developer you get no development and thus no affordable housing.
Communities Secretary Sajid Javid said there are new laws banning landlords and agents from charging rip-off feesRex Features

“A willing landowner will become unwilling if they do not get an acceptable price for their land and a developer will not be a willing developer if they do not get an acceptable return on their investment.”

New laws banning landlords and agents from charging rip-off fees will be laid down in parliament today.

Communities Secretary Sajid Javid said tenants should no longer be hit by fees of as much as £700 and should only be liable for their rent and a refundable deposit as the draft Tenant Fees Bill was introduced.

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